There is not so much money, which is obviously what Qiu Yucheng is most worried about.

As Lin Xiao's manager of the industry in the capital, Qiu Yucheng's assets under management are only billions of Huaxia coins, and those overseas earnings were basically in the hands of Concubine Han and several other women, and Qiu Yucheng did not come into contact with them.

Especially in the industries here in the capital, real estate is the majority, even if Lin Xiao wants to realize it, it is not so easy.

After all, real estate is a kind of thing, when it is hot, it is difficult to find a piece of tile, but once it is saturated, it is difficult to sell, especially for those core areas of land and property, if you don't meet the same big appetite of super companies want to settle in, it is difficult to find a suitable buyer.

Now Lin Xiao's properties in the capital are also facing the same problem, after all, if you spend so much money on these properties, you can rebuild a few office buildings nearby.

Qiu Yucheng is still more interested in the news in this magazine that Lin Xiao asked him to read, after all, Li Chaoren's vision for doing business is still very good, although he is old, but his brain is not confused, since he has taken a fancy to the aviation leasing industry, it means that this matter can be operated.

What's more, Qiu Yucheng has also seen some news before, and Warren Buffett is also involved in the aviation leasing industry.

The fact that both business giants are bullish on the aviation leasing industry at the same time is enough to explain a lot.

I believe that the people who see this are not only a few of them, but the funds involved in this industry are a bit amazing, even if the average person sees the business opportunities here, there is not so much money invested in it, they can only watch others make money, drooling in vain, and they can't get involved.

Qiu Yucheng believes that even if Lin Xiao wants to operate this matter, he does not have such a strong strength, and it is a bit overwhelming for billions of Huaxia coins to want to handle this kind of thing.

"Li Chaoren's previous business was mainly engaged in real estate investment and development, and his subsidiaries have ports, retail, energy and telecommunications businesses around the world, why does Li Chaoren, who has a huge industry, suddenly want to buy so many planes?" Lin Xiao analyzed Qiu Yucheng, "Obviously, he bought these planes mainly to engage in aircraft leasing business. In fact, he wanted to enter the aviation industry as early as ten years ago, when his son went to invest in Canadian aviation on his behalf, but it was unsuccessful because of the union backlash. Why do you want to do aircraft leasing this time? I thought about it for a while, and there were two main reasons. The first is that the industry is indeed profitable now, for so many years, the return rate of the aircraft leasing industry has always been higher than that of building aircraft, airports and airlines, and now many airlines want to cut costs, but also need new aircraft to strengthen competitiveness, and the mainland has approved new companies to join the development of low-cost airlines, which is a good opportunity for the leasing of new aircraft. Another reason is that although the aircraft leasing business is not a sunrise industry now, its return is very stable, although Li Chaoren can not expect to become the world's richest man overnight, but aircraft leasing can more resist the risks of the macroeconomic cycle, such as when the economy is in a downturn, airlines will be more leased instead of buying, so as to generate stable cash flow, which is what Li Chaoren likes. ”

"Yes, the aircraft leasing business is really promising." Qiu Yucheng listened to it and admitted that Lin Xiao's analysis was in place.

In fact, some public opinion on Hong Kong Island basically believes that this investment does reflect Li Chaoren's superior business vision.

According to the analysis of Hong Kong Island Business Daily, the opportunities in the aircraft leasing business, including the encouragement of this industry in the mainland of China, are the main factors attracting Li Chaoren, and the company's deployment of many foreign investments in recent years reflect its intention to gradually fade out of the real estate business with higher investment risks, and instead pursue non-real estate income with relatively stable returns.

As early as August this year, it was rumored that Li Chaoren's company intended to purchase aviation equipment assets and enter the aviation industry on a large scale.

In recent years, due to fierce competition, many airlines have cut costs and updated their fleets with more fuel-efficient aircraft, and Li Chaoren chose to expand his aviation business against this backdrop, which may be because he sees business opportunities brought by the huge demand in the mainland aviation market.

"According to a study by the International Air Transport Association last year, demand for air travel in Asia is expected to grow over the next five years5. 7%, the second fastest growth rate in the world, and our domestic and domestic routes will be the biggest driver. Lin Xiao continued to analyze, "The rapid development of low-cost airlines in Asia in recent years has significantly increased the demand for new aviation equipment. At present, there are more than 700 aircraft ordered from the mainland, accounting for about 40% of the total global orders, and it can be said that we have become the world's second largest aviation market after the United States. But these are still not enough, after all, our development momentum is too strong, relying on purchases alone, it is difficult to keep up with this growth rate, so the aircraft leasing market is promising. ”

Qiu Yucheng nodded repeatedly, in fact, Huaxia has been engaged in aircraft leasing for nearly 30 years, but domestic leasing companies have only started to engage in this transaction very late.

For a long time, foreign aircraft leasing companies occupy more than ninety percent of the market share of China's aircraft leasing market, and there are dozens of enterprises competing for China's aircraft leasing market, but many of them are small new entrants, and the market is still dominated by foreign aircraft leasing companies including General Electric Aviation Services.

Commercial aircraft leasing is generally divided into two types, one is a financial lease and the other is an operating lease.

When leasing an aircraft under an operating lease, the lessor has the ownership of the aircraft and can repeatedly lease the aircraft to different lessees for use, and the lessor not only provides financing facilities, but also provides repair, maintenance and other services.

In layman's terms, a financial lease is similar to buying a house with a mortgage, while an operating lease is equivalent to renting a house.

The advantage of operating lease is flexibility, the lease term is shorter than that of financial lease, financial lease will lease the entire service life of the aircraft, about 12 years, but the operating lease period will be shorter, about 5 to 8 years, when the lease period ends, the aircraft can continue to sublease.

For airlines, as the market is constantly changing, companies also need to adapt to the general trend and adjust the network layout, such as making some adjustments to aircraft models.

When airlines see some uncontrollable trends, they will want to be more flexible in the future, and when airlines need to change aircraft types, the lessee can make adjustments at any time under the operating lease model, which is the reason why the operating lease method is more popular.

For example, if you buy an aircraft and borrow money from a bank, for example, if you borrow 100% from a bank, the bank charges an interest rate of 6%, and when you lease it to the lessee, add at least 1 or 2 points, and the leasing company earns the interest rate differential.

If you take an aircraft of $50 million as an example, if you take a full loan, the leasing company needs to pay $53 million to the bank with interest at the end of the year, and if you lease it to an airline, if the rental rate is increased by 1 point, you can earn $500,000, and if you increase it by 2 points, you can earn $1 million.

Obtaining interest rate differentials is obviously the main source of profit for financial leasing companies, and the interest rate differential income depends on the level of risk, generally in 1% to 5%, financial leasing is equivalent to financing from the world's lowest capital cost region, and then lending to the world's highest financing cost region, if the pattern is large, it can definitely be done for a long time.

There are usually many listed companies under such international groups, which are distributed all over the world, and the financing cost in some regions is very low, such as the United States, which has a financing cost of about 2. 5% to 3%, this financing cost is very cost-effective to get Huaxia, because Huaxia's financing cost is about 6% to 7%, and there is a big interest rate difference in the middle.

Another major source of profit for financial leasing is residual value gain, which refers to the value of the aircraft after the end of the lease term.

For example, if a piece of equipment can be disposed of at what price after five years, the lessor will estimate a minimum price, and then calculate what kind of average rental income should be in five years to cover the cost and achieve what kind of benefit scale.

That is, it is necessary to wait until the assets are disposed of before the profit and loss of this aircraft can be known.

After the end of the operating lease, the residual value of the aircraft will directly affect the profitability of the lessor, and the aircraft can obtain better income through the resale and releasing of the aircraft through the leasing company after repair and maintenance, and the resale of the aircraft after the lease period or lease period can obtain greater income.

The concept of operating lease is that things are always owned by the lessor, and in the same lease period, the income is definitely less than the income of the financial lease, but the future residual value disposal right belongs to the lessor, and the asset management level of the lessor determines whether it can maximize its benefits.

Lin Xiao and Qiu Yucheng discussed this issue for more than an hour, and both of them were shrewd and capable, so it didn't take long for them to study the problems in it.

"If it looks this way, Li Chaoren should have too much money to have no place to invest, and at the same time look down on the real estate market in the mainland, so he found this profit growth point." Qiu Yucheng said to Lin Xiao, "After all, if so much money is put in the bank, not only will it not be gained, but it will also have to pay a lot of management costs, which is a relatively loss, and it is more in his long-term interests to find a suitable investment direction." ”

"Yes, at least after this business is completed, he won't have to worry about where the money will go in ten or eight years." Lin Xiao also nodded in acknowledgement.

"However, Li Chaoren has so much money to invest in this industry, where can we get so much money? The cost of financing in the country is too high, and even if it does, it will not be profitable. Qiu Yucheng frowned again.

You only need to look at the life of domestic banks to know how difficult it is to raise funds in China, how high the cost is, and if you want to do this, you have to go overseas to raise funds to be possible, but those foreign devils overseas, which one is the most wronged?

"I don't need to rely on them, I have dollars." Lin Xiao waved his hand and said with pride, "Don't say anything else, if you take out $18 billion, you won't be out of breath at all." ”

"Damn, really?!" Qiu Yucheng couldn't help but be stunned when he heard this.